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Imagine that you are planning a vacation. You will, of course, start by selecting the destination so that the journey can be planned accordingly. Similarly, in various areas of our lives, we have targets, which are our guiding forces. One of the most important areas of our lives is our finances. Having clear financial goals should be at the top of our priority list. It sounds simple, doesn’t it? But when we actually get down to listing our goals and quantifying them, we may find it to be a tedious task.

Here are some pointers to setting your financial goals. Examine your current financial situation. This will give you a clear picture of the resources that you have. One may have several goals for which financial provisions have to be made. Some of the goals could be the purchase of a house, children’s education, buying a car, a vacation abroad, buying expensive furniture, or your retirement. You will need to prioritise the goals that truly matter to you.  Your goals should be SMART: Specific, Measurable, Achievable, Realistic and Time-bound. Check whether your goals fulfil each of these parameters. Let’s look at an example of a smart goal. I want to start an events management company in Mumbai three years from now, for which I require a seed capital of Rs. 50 lakhs. I already have Rs. 20 lakhs in savings. I can accumulate Rs. 15 lakhs more by starting an SIP in a short-term debt fund for the next three years. I intend to borrow the remaining 15 lakhs from a financial institution. So, this is a viable goal.

Having clear goals will help you make informed and meaningful financial decisions. You will start investing with a purpose.  One has to remember that money is a limited resource. One needs to plan carefully so that we can utilise our resources well to achieve our goals. Most of us are enthusiastic about the early bird discounts. You will gain far more if you start planning as early as possible, towards attaining your financial objectives.

A comprehensive financial plan will also take into consideration taxation, risk management, and estate planning, besides investments. However, your goals will be at the core of the entire exercise.